Poor quality employment results from outcome-based funding models

February 7, 2013

A study recently selected for the American Psychological Association online journal, APA PsycNET, and published in the Psychiatric Rehabilitation Journal, finds that the rapid job placement strategy utilized in the Ontario Disability Support Program’s (ODSP) employment supports services has resulted in low quality, low-paying jobs which are limited in opportunities for career development for people living with mental illness.

The study was based on a qualitative case study in the mental health sector. Key informant interviews with three groups of stakeholders took place engaging program providers, policy informants, and mental health consumers who are involved in policy development.

The study examined the employment impacts observed when ODSP changed its service provider funding formula from a fee-for-service to a results-based model focused on job placements. While the intent of the new funding model was to increase competitive employment for persons with disabilities, it also had the unintended consequence of changing the way service providers worked with job seekers.

As a result of the funding formula, extensive pre-employment activities were offset by a focus on job placements. The study explains that ODSP did not direct service providers to use a specific model of service delivery, but the focus of their practice tended to shift to rapid job placement in order to meet funding expectations. This approach increased the number of job placements, but the jobs secured were often entry-level, low-paying wages with no opportunity for advancement, in part because training and skills development were not part of the new process. It also found that benefits and security were lacking in these types of jobs.

The study found that in practice, rapid job search – one component of a highly successful supported employment program – translated into rapid job placement. According to the study authors, this practice is ineffective in the absence of the other principles of individual placement and support (IPS). As this study revealed, a focus on rapid placement alone resulted in employment in unstable, low-paid positions that did not increase the quality of life for the job seeker.